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Credit approvals

112Provisions to be in place of sections 53 to 55 of 1989 Act

(1)Sections 53 to 55 of the [1989 c. 42.] Local Government and Housing Act 1989 (basic and supplementary credit approvals and the criteria for issuing them) shall not apply in relation to the Authority or any of the functional bodies.

(2)Sections 113 to 117 below shall apply in relation to the Authority and the functional bodies in place of the provisions mentioned in subsection (1) above.

113Aggregate credit approval for Authority and functional bodies

(1)Before the beginning of each financial year the Secretary of State shall issue to the Mayor, in the form of a notice in writing, a credit approval with respect to the credit arrangements and expenditure for capital purposes during that year of the Authority and each of the functional bodies.

(2)The Secretary of State shall send to each of the functional bodies a copy of any credit approval issued under this section.

(3)A credit approval issued under this section (an “aggregate credit approval”) may be nil but, subject to that, shall consist of such number of specified amounts of money, for such authorities or purposes, as the Secretary of State may determine.

(4)Each amount so determined and specified by the Secretary of State must be an amount of a category described in subsection (5) below.

(5)For the purposes of this Chapter—

(a)a category A amount is an amount for a specified authority with respect to the authority’s credit arrangements and expenditure for capital purposes during the financial year for which the approval is given;

(b)a category B amount is an amount for a specified authority with respect to the authority’s credit arrangements and expenditure for capital purposes of one or more specified descriptions during that year;

(c)a category C amount is an amount with respect to credit arrangements and expenditure for capital purposes during that year for allocation by the Mayor to such one or more of the authorities, and in such proportions, as he may see fit, and for such purposes consisting of or comprised within those purposes as he may state in the notice of an allocation;

(d)a category D amount is an amount with respect to credit arrangements and expenditure for capital purposes of one or more specified descriptions during that year for allocation by the Mayor to such one or more of the authorities, and in such proportions, as he may see fit, and for such purposes consisting of or comprised within those purposes as he may state in the notice of an allocation.

(6)In this section—

“authority” means the Authority or any of the functional bodies;

“specified” means specified by the Secretary of State in the approval.

114Additional credit approval

(1)Any Minister of the Crown may at any time issue to the Mayor, in the form of a notice in writing, a credit approval with respect to credit arrangements and expenditure for capital purposes.

(2)A credit approval issued under this section (an “additional credit approval”) shall have effect for such period as is specified in the approval.

(3)Where an additional credit approval is issued not more than six months after the end of a financial year, the period specified under subsection (2) above may be one which begins, or begins and ends, at any time during that financial year.

(4)Subsections (2) to (6) of section 113 above shall apply in relation to an additional credit approval as they apply in relation to an aggregate credit approval, but taking—

(a)any reference to the Secretary of State as a reference to the Minister of the Crown issuing the approval, and

(b)any reference to the financial year for which the approval is given as a reference to the period for which the approval has effect.

115Notification of category C or D allocations

(1)Where the Mayor makes an allocation from a category C or D amount—

(a)under an aggregate credit approval, to the Authority, or

(b)under an additional credit approval, to the Authority or a functional body,

he shall give notice of the allocation to each of the functional bodies.

(2)Where the Mayor makes an allocation to a functional body from a category C or D amount under an aggregate credit approval, notice of the allocation shall be given to each of the functional bodies by including a statement of the amount so allocated (together with a statement of the purposes for which the amount is allocated) in section B of the capital spending plan, pursuant to section 122(4)(d) below.

(3)In the other provisions of this Chapter, any reference to notice of an allocation from a category C or D amount is a reference to the notice of the allocation given in accordance with subsection (1) or (2) above.

116Amortisation

(1)Where regulations made by the Secretary of State so require, an aggregate credit approval or an additional credit approval shall specify, directly or by reference to tables or other documents specified in the approval, an amortisation period.

(2)In this section “amortisation period” means a period during which a relevant authority is required to set aside, from a revenue account, as provision to meet credit liabilities, such amounts as may be appropriately determined.

(3)If regulations under subsection (1) above so provide, an aggregate credit approval or an additional credit approval may specify—

(a)different amortisation periods in relation to the use of the approval in respect of credit arrangements and expenditure for capital purposes of different descriptions; or

(b)different amortisation periods in relation to different amounts specified in the approval.

(4)Subsection (1) above does not apply in relation to a category B credit approval issued in respect of expenditure which is treated as expenditure for capital purposes of a relevant authority by virtue only of directions under section 40(6) of the [1989 c. 42.] Local Government and Housing Act 1989.

(5)But the Secretary of State or other Minister issuing a category B credit approval may specify in the approval, directly or by reference to tables or other documents specified in the approval, an amortisation period in respect of such expenditure as is mentioned in subsection (4) above.

(6)In subsection (2) above, “appropriately determined” means—

(a)in its application for the purposes of subsection (1) above, determined in accordance with regulations under that subsection; and

(b)in its application for the purposes of subsection (5) above, determined in accordance with the approval.

(7)In this section—

“category B credit approval” means an aggregate credit approval or an additional credit approval to the extent that the approval consists of a category B amount;

“relevant authority”, in the case of any credit approval, means an authority—

(a)

for which a category A or B amount is specified in the approval, or

(b)

to which a category C or D amount is allocated under the approval.

117Criteria for issuing credit approvals

(1)In determining any amount to be specified in an aggregate credit approval or an additional credit approval, the Secretary of State or other Minister may have regard, subject to the following provisions of this section, to such factors as appear to him to be appropriate.

(2)Without prejudice to the generality of subsection (1) above, the Secretary of State or other Minister may, in particular, have regard—

(a)to the amount of any grants or contributions which it appears to him that a relevant authority has received and is likely to receive from any person in respect of expenditure incurred by the authority or to be incurred by the authority before the expiry of the period for which the credit approval is to have effect; and

(b)subject to subsection (3) below, to the amount of capital receipts which it appears to him that any relevant authority has received, might reasonably be expected to have received or to receive or is likely to receive before the expiry of the period for which the credit approval is to have effect.

(3)In determining any amount to be specified in an aggregate credit approval or an additional credit approval, the Secretary of State or other Minister shall not take account of capital receipts—

(a)to the extent that a relevant authority is required to set aside the receipts as provision for credit liabilities;

(b)to the extent that they are received as mentioned in subsection (7) of section 59 of the [1989 c. 42.] Local Government and Housing Act 1989; or

(c)to the extent that their amount falls to be treated as reduced for any purpose under subsection (8) or (9) of that section.

(4)In determining any amount to be specified in the aggregate credit approval or in an additional credit approval to be issued to the Mayor in any financial year, the Secretary of State or other Minister shall not take account of the extent to which it appears to him that any relevant authority is, or is likely to be, in a position to finance expenditure for capital purposes from a revenue account.

(5)In this section “relevant authority”, in the case of any credit approval, means—

(a)as respects a category A or B amount, the authority for which the amount is to be specified, and

(b)as respects a category C or D amount, any authority to which an allocation from that amount may be made by the Mayor in accordance with the approval.

118Part IV of 1989 Act and credit approvals under this Chapter

(1)Where a category A or B amount is specified for an authority in an aggregate credit approval or an additional credit approval, so much of the approval as relates to that amount shall be treated for the purposes of Part IV of the [1989 c. 42.] Local Government and Housing Act 1989 (other than sections 53 to 55) as a credit approval issued to that authority under that Part.

(2)Where an allocation from a category C or D amount specified in an aggregate credit approval or an additional credit approval is made by the Mayor—

(a)to the Authority, or

(b)to a functional body,

the notice of the allocation (read with so much of the credit approval as relates to the allocation) shall be treated for the purposes of Part IV of the [1989 c. 42.] Local Government and Housing Act 1989 (other than sections 53 to 55) as a credit approval issued under that Part to the Authority or, as the case may be, to the functional body.

(3)Section 56 of the [1989 c. 42.] Local Government and Housing Act 1989 (use of basic credit approvals and supplementary credit approvals) shall apply in relation to a credit approval treated by virtue of subsection (1) or (2) above as issued under Part IV of that Act as it applies in relation to a basic credit approval or a supplementary credit approval.

(4)Any reference in this Chapter to the use of an aggregate credit approval or an additional credit approval is a reference to the use, under Part IV of the [1989 c. 42.] Local Government and Housing Act 1989 or any other enactment, of any credit approvals treated as issued under that Part by virtue of the application of subsection (1) or (2) above in relation to the aggregate credit approval or, as the case may be, the additional credit approval (and related expressions shall be construed accordingly).

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